Why the Dollar Could Rally in 2011
Should the dollar rally your weapon of choice is the "Bullish Dollar ETF" which is the PowerShares DB US Dollar Index Bullish Fund (NYSE:UUP) now trading at $22.30 a share.
Bucking a Trend: Why the Dollar Could Rally in 2011 | JOSEPH LAZZARO
(DailyFinance) Despite a likely third straight year of $1 trillion U.S. budget deficits, and the U.S. Federal Reserve's controversial quantitative easing program, the U.S. dollar has basically remained flat against the world's other major currencies. Compared to the British pound, it has barely budged over the past year, going from $1.6153 to $1.6093. At the same time, it fell a relatively small 4% against the Canadian dollar and went up 5% against the euro.
Admittedly, the dollar lost a substantial 10% of its value against Japan's yen, but unless you're willing to "park" your money in Japan's famously low-interest banks for almost no return, the yen is not a worthwhile option. By extension, that same drive for yield/return will probably discourage many institutional investors from trading in their dollars for yen.